05 Nov India – Story
India has now become the world’s most expensive market based on price-to-earnings ratio.
The Sensex’s P/E ratio on a trailing basis is 24.53 times compared with 19.67 for the Dow Jones, 23.32 for the UK and 17.04 times for the Shanghai composite.
SIP flows are robust and more and more people are investing in mutual funds because other asset classes no longer hold much potential.
Interest rates are inching downwards, real estate is likely to correct further and liquidity continues to be a very big issue with real estate. Gold as an ornament is losing demand amongst the new generation and it’s long term potential does not look promising. Remember “cash” is on its way to become history.
New AMFI chief N S Venkatesh predicts that the industry will grow by 20% to 25% over the next 3 years.
In this kind of momentum we need to be prepared to grow our business by
1) Using technology (both back office software and transaction software)
2) Forming a private Ltd company if you don’t have one. This will help you in your succession planning. Secondly it will help in valuation of your business and so on.
3) Creating and registering the brand name. This will protect your business several years down the road when your business grows larger
4) Creating a network of sub-brokers. India is a large country of mass customers and reaching out is the most important task
5) Building your personal brand. Without a brand no business is sustainable.
6) Conducting good quality “Investor Awareness Programs” and learning the skills to do so. Education is at the heart of our business. Unless we empower the customer forget about earning his trust
7) Focussing on the customer from a long term perspective. Unless we have his or her interest as our priority, there’s no question of earning well from his or her business because an advisor only earns over the years.
7) Investing in your business. Don’t wait for someone’s help. Help yourself. Time is of essence. Don’t lose it. Think long term. Your business isn’t only about up-front and trail. It is very much about valuation. Create that valuation by utilising the time available smartly.
This is a once in a life time opportunity.
The next 15 years will be India’s growth phase like it was in the nineties in the US.
The question hence, one needs to ask is
1) “Am I prepared?
2) If not, then am I doing enough to prepare myself?
Wish you the best of luck.